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Gordonomics will ruin the pound.

Lee Hardman, of the Bank of Tokyo-Mitsubishi UFJ, said: 'So far the Labour government has a commitment to halve the budget deficit over the next five years but has no credible plan.

Accordingly we have lowered our target for sterling further, anticipating a fall towards $1.40 against the dollar while maintaining the euro will rise towards £0.95 against the pound over the next three to six months.

'A Labour victory would further damage the fiscal credibility of the UK given their reputation for loose fiscal policy, at a crucial juncture given the need for a credible plan to bring down the budget deficit.'

The pound hit a 24-year low of $1.35 last year in the worst depths of the recession.

Nick Beecroft, of Saxo Bank, said: 'This morning we have witnessed what can justifiably be called the beginnings of sterling's collapse.

'So long as the markets could harbour some hope that the next government, in only three months time, would be a fiscally prudent, business-friendly Conservative one that would act swiftly to reduce the UK deficit and borrowing mountains, the pound was able to just about hold its own against the euro - but today the dam burst and it could not even do that.'

Chris Turner, head of foreign exchange strategy at investment bank ING, said: 'Despite protestations to the contrary, the UK is struggling to avoid comparisons to Greece and fears of a debt downgrade are stalking the pound.

'The market remains fearful that minority governments will struggle to quickly address the budget deficit.'

The Tories' deployment of Mr Clarke - one of the party's 'big beasts' - to attack the Government's record is an acknowledgement that their campaign has so far focused too narrowly on David Cameron and George Osborne.

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